Value Chain Labs ®
Every organization has boundaries across which it must operate - whether it's hierarchical boundaries; horizontal ones based on function or product lines; geographic boundaries; or external ones that separate the customer and supplier.
While some boundaries serve a needed purpose, and some are unavoidable, others act as walls that cause inefficiency, stifle innovation and increase the costs of doing business. We developed our Value Chain Labs ® over ten years ago to help companies break through the walls, silos or other boundaries that are short-circuiting their value-creating potential - especially their customer-supplier boundaries.
The Lab is a carefully-designed and closely-facilitated workout process that brings a customer team and supplier team together to critically examine and improve their relationship with the ultimate goal being one of a mutually-profitable and sustainable association. While most labs are intended to resolve specific relationship problems or joint challenges, others are intended to be more forward looking or seek ways to further leverage an already solid relationship.
The typical customer-supplier Lab takes approximately eight hours to conduct although some have been longer, some have been shorter, and some have resulted in a series of subsequent Labs with other business units or functions in a particular customer supplier connection. There are three core elements of a Value Chain Lab ®:
- An innovative Business Case for Competitive Advantage. The business case creates a shared understanding and urgency around the need for a new kind of customer-supplier relationship.
- A proven method for examining and addressing cross-boundary issues, concerns and opportunities. This method becomes an on-going part of the new customer-supplier relationship.
- An established change model designed to close the gap between the relationship's current and desired state, as well as measure the progress of the relationship.
The most effective Labs are those which have 6 - 8 participants from the customer company and 6 - 8 comparable participants from the supplier company; and those participants represent the key touchpoints in that particular relationship. We have had Labs with as few as 4 on 4, and as large as 12 on 12. An example of the participants from one particular Value Chain Labs ® is shown below.
Departments or Functions
Impacted by ABC
- Operations Manager
- Biz Development Manager
- Product / Sales Manager
- Warranty & Claims
- Service & Support
- Accounting - A/R
Note: a typical Value Chain Lab ® project includes providing the Lab sponsor (who is often, but not always, the supplier) with related guidance and support such as: deciding which customers, and participants therein, to invite, and how to go about inviting them; getting the supplier team ready to face the customer by flushing out internal issues before participating in the external Lab; training both groups on specific cross-boundary collaboration skills; and, taking specific steps to ensure mutual ownership and implementation progress occurs once the official Lab is over and the participants return to their respective jobs and companies.
Value Chain Labs ® have been used to help organizations team across the customer-supplier boundary, as well as other boundaries, to achieve a wide range of economic and other benefits.
While the customer-supplier setting is an ideal application for our Labs, it is not the only application. Value Chain Labs ® are also used to achieve unique results in numerous other situations. See Other Lab Applications.
"Value Chain" - Those entities and activities involved in the design, production, marketing, distribution and support of an organization's products and services.
"Lab" - A place providing opportunity for analysis, discovery and practice.